This is a tool that helps in trading on stock markets.
CandleScanner is a technical analysis software. It is able to search Japanese candlestick formations on trading pattern trends and find patterns. It can create some statistics on them, that further eases decision making of trading. It thus helps build trading strategies based on these candlestick formations. Search of the candlesticks formations collects formation occurrence frequency and their efficiency. In case of bullish reversal or bullish continuation formations CandleScanner checks for how many days since the formation occurred closing prices were higher than the close price of the last formation`s candlestick. In case of bearish reversal or bearish continuation formations, how many days since the formation occurred closing prices are lower than the close price of the last formation`s candlesticks. If it is zero days, the prediction is considered a false prediction. One to three and 4 to 6 days are considered low and medium efficiency formations while 7 to 10 days formations are considered high efficiency. All bullish formations are treated as long positions while bearish formations as short positions.
The tool includes a transaction simulator or a back tester that can open or close transactions based on the detected formations. The tool provides possible customized market entry or exit conditions. The data quotes for the formation of the candlesticks will need to be supplied by the user, of course. These can be entered either as text files or binary MetaStock files. These inputs can be made through the application menu and user can add new tickers from the text files and new tickers from the MetaStock binary files. New tickers from Yahoo! Finance also can be added. Candlestick formations can be searched for in two ways. You could search for candlestick formations and update statistics or search without updating the stats. This is a very good tool.